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Dick's Sporting Goods(DKS) - 2024 Q3 - Quarterly Report
DKSDick's Sporting Goods(DKS)2023-11-21 16:00
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Sales Performance - Net sales increased by 41.3% in fiscal 2022 compared to fiscal 2019, driven by growth in key categories such as footwear, athletic apparel, team sports, and golf [48]. - Net sales increased by 2.8% to 3.04billioninthecurrentquarterfrom3.04 billion in the current quarter from 2.96 billion in the same quarter of 2022, driven by a 1.7% increase in comparable store sales [17]. - Comparable store sales increased by 1.7% in the current quarter, down from a 6.5% increase in the same period last year [61]. Profitability and Margins - Merchandise margins increased over 300 basis points as a percentage of net sales in fiscal 2022 compared to fiscal 2019, with pre-tax income as a percentage of net sales growing from 4.7% to 11.2% [49]. - Gross profit increased to 1.06billion,withagrossprofitmarginimprovementof67basispointsduetolowersupplychaincosts[64].−Selling,generalandadministrativeexpensesroseto1.06 billion, with a gross profit margin improvement of 67 basis points due to lower supply chain costs [64]. - Selling, general and administrative expenses rose to 776.0 million, increasing as a percentage of net sales by 254 basis points, influenced by business optimization charges and investments in talent and technology [65]. Expenses and Charges - Pre-tax business optimization charges of 52.5millionwereincurredinQ32023,primarilyduetotheeliminationofpositionsandintegrationofMoosejawoperations[53].−Thecompanyanticipatesadditionalpre−taxchargesofapproximately52.5 million were incurred in Q3 2023, primarily due to the elimination of positions and integration of Moosejaw operations [53]. - The company anticipates additional pre-tax charges of approximately 10 million during Q4 2023 related to outdoor specialty business optimization [53]. - Selling, general and administrative expenses are expected to moderate by approximately 150 basis points from Q3 as a percentage of net sales [52]. Store Operations - Comparable store sales, including online sales, are considered a key performance indicator, impacting total net sales and cash flow [55]. - The company opened 10 new stores in Q3 2023, bringing the total to 869 stores by the end of the period [57]. Inventory and Supply Chain - Inventory shrink is expected to be approximately 50 basis points higher than fiscal 2022 on a full-year basis, reflecting industry-wide trends [52]. - Supply chain costs are expected to remain lower than fiscal 2022 for the remainder of the fiscal year [52]. Shareholder Returns - The company repurchased 3.5 million shares of common stock for a total cost of 388.1millionunderitssharerepurchaseprogram[17].−Duringthe39weeksendedOctober28,2023,thecompanyrepurchased5.4millionsharesatacostof388.1 million under its share repurchase program [17]. - During the 39 weeks ended October 28, 2023, the company repurchased 5.4 million shares at a cost of 648.6 million, leaving 779.6millionremainingunderthesharerepurchaseprogram[86].−Dividendspaidtostockholdersduringthe39weeksendedOctober28,2023,amountedto779.6 million remaining under the share repurchase program [86]. - Dividends paid to stockholders during the 39 weeks ended October 28, 2023, amounted to 270.6 million, with a quarterly cash dividend of 1.00persharedeclaredforDecember2023[88].CashFlowandCapitalExpenditures−Cashflowsfromoperatingactivitiesincreasedby1.00 per share declared for December 2023 [88]. Cash Flow and Capital Expenditures - Cash flows from operating activities increased by 729.1 million to 764.7millionforthe39weeksendedOctober28,2023,comparedtotheprioryear[92].−Cashusedininvestingactivitiesroseby764.7 million for the 39 weeks ended October 28, 2023, compared to the prior year [92]. - Cash used in investing activities rose by 140.4 million to 433.3million,includinginvestmentsinDICK′SHouseofSportstoresandtheacquisitionofMoosejaw[93].−Capitalexpendituresforthe39weeksendedOctober28,2023,totaled433.3 million, including investments in DICK'S House of Sport stores and the acquisition of Moosejaw [93]. - Capital expenditures for the 39 weeks ended October 28, 2023, totaled 409.5 million, with expectations for fiscal 2023 capital expenditures between 550millionand550 million and 600 million [84][85]. Interest and Tax - Interest expense decreased to 14.4millioninthecurrentquarterfrom14.4 million in the current quarter from 26.1 million in the prior year quarter, primarily due to lower interest expense on the Convertible Senior Notes following their retirement [67]. - The effective tax rate increased to 25.1% in the current quarter from 24.9% in the prior year quarter [69]. - Other income increased by 67.9millionto67.9 million to 56.3 million, driven by a 44.8millionriseininterestincomeanda44.8 million rise in interest income and a 22.8 million reduction in deferred compensation plan expenses [76]. - The effective tax rate decreased to 18.7% from 24.1%, influenced by a 39.8millionincreaseinexcesstaxbenefitsduetohigheremployeeequityawards[77].FinancialPosition−CashonhandasofOctober28,2023,was39.8 million increase in excess tax benefits due to higher employee equity awards [77]. Financial Position - Cash on hand as of October 28, 2023, was 1.41 billion, with an additional 1.6billionavailableundertheunsecuredcreditfacility[78].−Liabilitiesassociatedwithsupplychainfinancingarrangementswere1.6 billion available under the unsecured credit facility [78]. - Liabilities associated with supply chain financing arrangements were 38.9 million as of October 28, 2023, down from $56.1 million a year earlier [90].